PSI of govt purchase contrary to import policy https://businesspostbd.com/post/25628

M S Siddiqui

28 Aug 2021 00:23:24 | Update: 28 Aug 2021 00:23:24

Different Ministries very often let their officials of different purchasing

authorities including few officials of the ministry to go abroad for pre-

shipment inspection (PSI) at the “expenses of suppliers” with the condition

that these inspection period as official duty and they will submit a report after

return about the inspection before shipment.

The government officials are not technical experts on specification and quality of

all goods and services but they inspect the consignments before shipment. They

don’t undertake the liability of supply of poor quality materials. This is an

opportunity of government officials to go abroad but without apparently any

liability.

In an inspection, supply of poor quality equipment has been surfaced with the

intervention of Trade Union Leaders. General Secretary of BIWTC Sramik Union

sent letters to shipping minister, shipping ministry’s parliamentary standing

committee Chairman, shipping secretary and BIWTC Chairman on November 23,

2020 demanding punishment against corrupt officials involved in procuring non-

functional fog lights. The authority became active upon such disclosure.

This dispute of supply of interior quality equipment of BIWTC went to court

against confiscation of security money of the supplier. It appears that government

is not holding the team of inspectors consisting of officials of ministry for the

supply of poor quality equipment. In this occasion, one official from the

Corporation and three officials from the shipping ministry went to USA for

inspection.

There is no provision in the Public Procurement Rule 2008 about PSI by officials

of purchasing authority or relevant ministry. As per Import policy order of

Bangladesh government, pre-shipment Inspection of goods for import in the public

sector for the value of a single item authorized for import is Tk 50 lac or above.

The importing department shall arrange Pre-shipment Inspection. The PSI shall be

entrusted to internationally reputed surveyors only.

In a few situation public sector agencies may however, be allowed to clear goods

on production of a certificate from their Administrative Ministry to the effect that

pre-shipment inspection requirement has been waived by that Ministry in respect

of the imported goods or that no pre-shipment in respect of a particular

consignment was considered necessary. Therefore, no such arrangement of

inspection by government or departmental officials but only by internationally

reputed surveyor as this is a technical job and need expert knowledge.

The purchasing authority insert a clause of PSI in the tender document to read as

“to ensure quality, quantity, packing, marking, and loading, etc, as per purchase

order, inspection of the imported goods shall be arranged at suppliers cost prior to

shipment through inspection officials. Such a rule of tender is contrary to the

Import Policy order of the government.

According to procurement policy, the purchaser shall have the right to test the

goods to confirm their conformity to the contract specifications. The technical

specifications of the materials shall specify what tests the purchaser requires and

where they are to be conducted. The supplier shall at its own expense and at no

cost to the purchaser, carry out all such tests of the goods and related services as

are specified in the Contract. The purchaser may reject any goods or any part

thereof that fail to pass any test and/or inspection or do not conform to the

specifications. The supplier shall either rectify or replace such rejected goods or

parts thereof or make alterations necessary to meet the specifications at no cost to

the purchaser, and shall repeat the test and/or inspection, at no cost to the

purchaser, upon giving a reasonable advance notice.

As of global practice, the standard pre-shipment practice to inspect and keep mark

of inspection and usually put the material/equipment into the containers and lock

and seal the container. During the unloading of the consignment from the same

inspectors will present at the port to open the seal and lock. There is no such policy

or guideline of PSI of government procurement in Bangladesh.

In case of Bangladesh, the high officials do not remain present during loading of

consignment in the container and not personally put seal on the lock. They never

go to the place of opening of the container either at the port or at the site of the

project. The PSI is meaningless without presence of inspectors or their

representative during loading and unloading of the consignment from the

container. The visiting high officials only give a report to the ministry. The process

has many loopholes for manipulations.

There is an argument that the visit cost nothing to the government but while the

suppliers offer free trips these are not free as any such expenses are included in the

cost of products as contingency expenses by the suppliers usually for corrupt

countries.

The procurement process has rule for determination of specification of the

products, scrutiny of technical offer and PSI of the products. The preparation of

specification and evaluation of technical documents for international procurements

vested to the experts but the PSI in other country is reserve for the non-technical

high officials. The procurement rule also allowed outsourcing of external export to

support the procurement.

On the other hand, the PSI needs very specialised knowledge and there are many

reputed local, regional and multinational companies. They usually don’t travel to

other countries to avoid the cost. The surveyor(s) inspect the consignment before

shipment and their representative(s) in the destination country present personally

during opening of the container to confirm the intact seal and lock to ensure the

delivery of inspected materials. The inspecting company also liable for quality and

quantity of the consignment.

In case of Bangladesh government purchase, inspectors are not responsible for the

wrong delivery of the consignment due to lack of proper inspection. The

purchasing authority usually shift the responsibility on the supplier despite having

inspection report of high government officials.

The inspection by government official is against the Import Policy Order as well as

it is expensive for the nation and not serving the real purpose. The inspectors are

not liable for any incidence of wrong delivery. According to a research article on

purchase of LGED - “In many cases, project officials and ministry officials enjoy

the foreign trips in the name of PSI which is simply misuse of public fund”. The

best value for money is not always achieved in case of procuring goods in the

public sector organizations.

The writer is a legal economist